Standing Committee E

[Mr. Peter Pike in the Chair]

Housing Bill

Clause 48 - Notification requirements relating to designations

Question proposed [this day], That the clause stand part of the Bill. 
 Question again proposed.

Keith Hill: As I said this morning, I agree with the hon. Member for South Holland and The Deepings (Mr. Hayes) about the importance of proper and satisfactory notification of additional licensing schemes. The Government intend to ensure, for the sake of consistency between one local authority area and another, that standard terms and formats for the provision of information are universally understood and adopted. Whatever their local authority, landlords and tenants need to know how they can easily obtain information on designations for the additional licensing of homes in multiple occupation. They need to know where and how the local housing authority will make available copies of the designation and such information relating to the designation as we would prescribe.
 The proposition to make such a designation will have been well adumbrated in the locality as part and parcel of consultation process. I am confident that the provisions will allow proper notification and information. I hope that I have explained clearly the approach that we have taken and the reason why the amendments are unnecessary, and I invite the hon. Gentleman to withdraw the amendment. 
 I take this opportunity to respond to issues raised by Committee members in the course of our proceedings, as I have done—helpfully, I think—on previous occasions. At last Thursday's sitting, my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) raised an important and detailed question on the definition of a house in multiple occupation. Oddly enough, I was unable to answer in the detail required. However, I can do so this afternoon, and I will try to give my hon. Friend as thorough an answer as possible. However, I warn her that it is a complicated answer because it depends on consideration of types of ownership and management, on the numbers of dwellings and on the conformity of a property to building regulations. All those factors are variable, and each could lead to a separate conclusion about the designation of the property as an HMO under the Bill. 
 Let me make a stab at shedding light on the question, which envisaged a circumstance in which a house was divided into self-contained flats, some of 
 which were privately rented, others owner-occupied and some managed or owned by a registered social landlord. She asked whether such a property would come within the definition of an HMO. If the house had been converted to the standards required under the Building Regulations 1991, under clause 193 it would not come within the definition of an HMO, regardless of the ownership or tenure of the individual flats. Schedule 9 specifies which buildings cannot be regarded as HMOs other than for the purpose of part 1. Paragraph 3(1)(a) excludes buildings managed or controlled by a registered social landlord. If the RSL owns or manages the whole building, it would not be an HMO under the Bill. Likewise, any individual flats in multiple occupation in that building would be exempt from the definition if they were managed by a registered social landlord. 
 The building would not necessarily be exempt from falling within the definition of an HMO if the RSL managed or controlled only part of the building; that is to say, some of the flats. There is no question of ignoring those parts of the building managed by an RSL for the purpose of assessing whether the building as a whole is three storeys high. That does not mean that it would definitely be an HMO, because other factors, such as the proportion of owner-occupiers, and whether the building standards test were met, would be equally relevant in deciding this question. I tried to explain those conditions in more detail during our consideration of clause 193, when I said that the Government do not intend to extend mandatory licensing to those types of blocks of flats. Local authorities will have discretion to apply additional licensing in cases and areas where there are significant problems with those blocks. Primarily, however, bringing such properties within the HMO definition would ensure that they were properly and effectively managed through the approved code of management practice and the management regulations. 
 If a property were under the temporary management of an RSL—perhaps because it had agreed to act as a manager for the local authority under a final management order—the HMO provisions would not apply to the RSL during its tenure as manager. A licence would be required only when the property reverted to private management. I should add that these provisions apply equally to houses in which a local authority has an interest. I hope that that is helpful. 
 The short answer is that the local authority will have to deal with each property on a case-by-case basis judged against the criteria set out in the Bill. I hope that that goes at least some way to answering the questions raised by my hon. Friend the Member for Regent's Park and Kensington, North.

Peter Pike: Order. I, too, hope that what the Minister said was helpful, but I do not want to re-open the debate on clauses that have already gone. If the hon. Lady wanted to comment, I would be prepared to call her; but very briefly.

Karen Buck: I thank my hon. Friend the Minister for his answer. I do not intend to re-open the debate. He provided some helpful clarification. However, as we
 get into the increasing complexity of the right to buy and temporary accommodation being let by RSLs in the same property as private rental tenants and owner-occupiers, we will need local authorities to be on their toes—with the encouragement of the Department—to ensure that some individual occupants of small buildings with a mixture of tenure do not find that they are at risk, or in any way disadvantaged, because of that pattern.

Peter Pike: Order. Although it was important that that was put on the record, I should, strictly, have ruled it out of order. The Chairman was very lax.
 I understand that no amendment was moved; although the Minister referred to an amendment, none is before us. 
 Question put and agreed to. 
 Clause 48 ordered to stand part of the Bill.

Clause 49 - Duration, review and revocation of designations

Matthew Green: I beg to move amendment No. 232, in
clause 49, page 32, line 4, at end insert 
 'but must be within six months.'.
 This is a teaser amendment. I noticed a slight oddity, which I am sure the Minister did not intend when the Bill was drafted. The designations last for five years, but if one is to be revoked, it 
''ceases to have effect at the time that is specified'' 
by the authority ''for this purpose.'' An authority could specify that the time was 25 years hence, although it is unlikely that that would happen. Although there will be a period of five years after which the measure can be revoked, the authority could set an unspecified time for it to be revoked, saying, ''Yes, we have had five years and the revocation comes into effect in 100 years.'' I realise that I am being slightly flippant, but it could be left open for a considerable length of time. I am sure that that is not what the Minister meant. The amendment seeks to clarify matters by saying that if local authorities are going to revoke licenses, the designation ceases to have effect at the time specified by the authority for this purpose and the period is not more than six months.

John Hayes: The hon. Gentleman is underselling his amendment. There is a serious point, which penetrates deeper than the flippant case that he is making about 100 years or 25 years. The real point is that there may be rapidly changing circumstances in a designated area. New building or substantial social change may be taking place fairly rapidly. The designation period, and the period in which the designation is revoked, needs to reflect quickly a change in circumstances that will have a real impact on the nature and quality of life in the area. The hon. Gentleman makes a good point, but he needs to make it more along those lines, rather than putting the fanciful case he did. I suspect that he had too good a lunch.

Matthew Green: I am afraid I have not had lunch. I was going to say that I was enjoying the debate in the Chamber, but I do not think that it has reached the level of debate yet. The hon. Gentleman has a good point, but I do not think he has to worry if the period is less than five years because clause 49(2) implies that it is
''no later than five years''.
 The period could be shorter. My concern is that the legislation is open-ended. That is not something that should trouble the Committee for a long time, but I am sure that the Minister does not mean it to be open-ended. I tabled the amendment in the spirit of being helpful and constructive, as I always am.

Yvette Cooper: Clause 49 requires that a designation for additional HMO licensing should last no longer than five years. [Interruption.]

Karen Buck: My sincere apologies to everyone, Mr. Pike. I put a new battery into my pager, and I obviously forgot to put it on ''silent'' mode.

Yvette Cooper: A local authority must, from time to time, review a designation and following any such review, a local authority may revoke designations. On revocation of a designation, the local authority must publish notice of the revocation as is prescribed by regulations under clause 49(6). A counterpart to clause 49 for selective licensing is clause 71. The reason for including that provision is that people need to understand their legal obligations. Without such notice, people will not be aware of their responsibilities. The provision ensures that the revoking of a designation scheme is made known throughout an area as effectively as possible.
 The amendment proposes that where a local authority revokes a designation, it ceases to have effect within six months. Where authorities choose to revoke designations, it is likely that they will generally do so promptly. However, there may be instances where a longer period may be necessary. A local authority wanting to give early warning of its intention to revoke may want time to prepare for the transition to a non-licensing environment by seeking, for example, to promote alternative approaches, such as voluntary accreditation or something similar, prior to revocation. 
 In practice, the amendment would have little effect because the decision to revoke a designation is within the local authority's discretion, so if it wanted to delay the coming into force of a revocation by more than six months, it would simply delay the decision until a point six months before it wanted the measure to come into effect. 
 To clarify the other point raised by the hon. Member for Ludlow (Matthew Green)—he misunderstood the way that the clause works—clause 49(1) refers to a designation being previously revoked under clause 49(4). The designation will run out in five years' time, or earlier, if revoked. It can be revoked at an earlier period, so it is a matter for local councils to decide whether to revoke it; they can review it at an earlier stage. At that point, the provisions 
 concerning the revocation set out in the remainder of the clause would apply. The sort of circumstances described by the hon. Gentleman would not apply because the clause sets out that the designation would run out in five years of earlier. On that basis, I ask him to withdraw the amendment.

Matthew Green: The Minister has clarified that point effectively, so I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 49 ordered to stand part of the Bill. 
 Clause 50 ordered to stand part of the Bill.

Clause 51 - Temporary exemption from licensing requirement

John Hayes: I beg to move amendment No. 265, in
clause 51, page 33, line 2, at end insert— 
 '(2A) An Owner of a property in the process of selling that property shall be entitled to a temporary exemption until it has been sold, and the subsequent owner shall be entitled to a similar temporary exemption in which to make the necessary preparations to obtain a license, if a license is required under the terms of the Act.'.

Peter Pike: With this it will be convenient to discuss amendment No. 275, in
clause 61, page 41, line 6, at end insert— 
 '(c) An Owner is in the process of selling a property at the time the requirement for a licence is issued'.

John Hayes: It is good to back in the throes of our important and interesting work, and it is good to welcome the hon. Member for Teignbridge (Richard Younger-Ross), a new member of the Committee. It has taken some time for the notification of these sittings to reach him. Whether that is because there are other matters of a personal nature that he places higher on his list of priorities than housing and the concerns about the vulnerable which we have been discussing in Committee, is a matter for him, his conscience and his constituents.
 At this juncture, it is important to look closely at the implications involved when someone who manages or controls an HMO that is not licensed is in the process of selling that property. The amendment would insert a new subsection in clause 51. We heard earlier that we are talking about a rapidly moving marketplace, about which the Minister was right to use the word ''fragile''. Given our concerns about that fragility, the need to bring new people into the marketplace, and our knowledge that properties move in and out of the sector and the licensing regime, and—in the case of landlords with a number of properties that they rent out—are added to landlords' portfolios and leave them, it is important that we make provision for properties in transition and landlords who are either selling or buying a property and therefore should not be unnecessarily penalised under the Bill. I do not think that the Bill is intended to penalise them, and the Minister is sensitive to such issues and the messages that we broadcast to landlords. 
 I hope that this is a sensible amendment that would make provision for landlords to have an appropriate exemption in the case of selling or buying a property. I am talking about an existing owner disposing of a property or a new owner obtaining one. I do not think that the Minister will have any difficulty accepting the amendment in the spirit that he has displayed throughout our proceedings. 
 The other amendment in this group, No. 275, works in conjunction with the lead amendment. It would allow being in the process of selling a property that should have a licence to be a defence for not having a licence for that property. Some people who are buying a property and are not fully familiar with their obligations on licensing may well be caught out. We have said throughout our proceedings that people who are engaged in the process of renting out HMOs should be subject to proper scrutiny. However, if someone does not have a licence and did not know that they should have one, because they have just bought the property, it is reasonable for them to say, ''I wanted sufficient time to acquaint myself with my responsibilities and to go through the process of obtaining a licence.''

Chris Ruane: I have a simple question: how long is a reasonable time?

John Hayes: It is a fair question. I am glad that I have excited the hon. Gentleman into an intervention, because it is good that we all play a healthy part in these affairs. However, it is not for a man of my limited capacity to define that period. The Minister, with his infinitely greater experience, and somewhat greater wisdom, will no doubt want to comment on that when he sums up. When he embraces the amendment, as I am confident he will, he will no doubt describe to the Committee what he believes to be a reasonable time. I think that we could come to a sensible agreement during the Bill's passage about what constitutes a reasonable time. The hon. Member for Vale of Clwyd (Chris Ruane) is implying that if we accept this amendment without a time scale built into it, some people would exploit that loophole. I know that he is worried, and rightly so, that what I am describing as a fair and reasonable defence on the part of someone who might be unaware of their responsibilities could be perceived as a loophole by which an irresponsible person who was buying and selling properties might make an unreasonable defence. If that is the case that he is making, I think it is fair.

Chris Ruane: If a landlord is to buy a new property, surely he will go through his solicitor, who should make him fully aware of his new responsibilities.

John Hayes: The hon. Gentleman has an innocent and endearing faith in the law. His experience with lawyers has obviously been an entirely happy one. To that degree he must be a very special person indeed, certainly in my experience of the law.
 The hon. Gentleman is right, of course, to say that one would hope that a potential landlord would be made fully aware of all his responsibilities, but it is important that we provide safeguards. My purpose in tabling the amendment—which, incidentally, I had no 
 idea would excite such a lively and heated debate—is to ensure that we do not target legislation at people who are behaving responsibly in the estimate of any reasonable person, but are perhaps acting outside the law as it is written at the moment. 
 I am trying not to send out the wrong messages to the marketplace. As I said this morning, I am aware that landlords are concerned about some aspects of additional licensing; indeed, they are concerned about licensing per se. Part of our job is to assuage their concerns, and to assure them that we are building into the legislation the necessary protection for people who are not deliberately behaving in an unacceptable or unreasonable way.

Matthew Green: The hon. Gentleman makes a reasonable point. However, I am concerned at the way in which the amendment is framed, because the Government's approach is to say that the local housing authority has to convince them
''that the house is no longer required to be licensed''—
 it will not be an HMO under the regulations. My concern is that if, say, an extended family owns properties, selling them every couple of months between themselves, they could escape licensing as a result of the fact that the property in question was ''being sold''. I am concerned that the amendment opens a loophole to such a situation.

John Hayes: Like so many well-intended amendments this could close one loophole but open another. I would never want to plead entirely innocent to that, because it takes a very skilled draftsman not to do what the hon. Gentleman implies. However, it is a bit fanciful to assume that there are masses of extended families just waiting to sell their properties every one or two months. There may be such people in Ludlow, but I do not know many of them in Lincolnshire. We would close the loophole that could lead to a person who became a landlord finding themselves outside the law and being prosecuted because they did not have the time, the wherewithal or—I take the point made by the hon. Member for Vale of Clwyd—good enough advice to obtain a licence. That is not the intention of the law, and we are trying to seal that loophole.
 The hon. Member for Ludlow makes a sensible point, but we have got to be careful about its implications. However, I am absolutely confident that when the Minister adopts the amendment we can find a way of dealing with that potential problem in a more sensible way than that proposed in the Bill. I tabled these amendments on that basis, and I will be interested to hear the Minister's response, which I am sure will be as entertaining and well informed as ever.

Robert Syms: I shall comment briefly in support of my hon. Friend, who has made a very persuasive case. The important thing is that we may reach a situation in which, because of the licensing regime, owners with several substandard HMOs do not want to invest a lot in these properties. However, they have tenants, and the solution may be not to invest in the property but to
 sell it on to someone else who will invest in it to bring up the standard. Would the people involved want the tenants, even in those properties that may have problems, thrown out in the street in the intervening period because the property was not licensed?
 Such matters would not make a great difference in respect of one property, but if the housing authority wanted to improve several substandard properties in an area, part of the solution might be to have more responsible people to purchase the properties. In such cases, it might be sensible not to turf people out on the streets, but to allow a transfer of ownership to effect the investment to bring the property up to standard. That element of the amendment would make sense. 
 The hon. Member for Vale of Clwyd made a very good point. How long is reasonable? Under the Bill, it is within the discretion of a local authority to vary a licence for three months and then a further three months, which might be long enough. The Bill may already provide latitude for a local housing authority to make such a variation. However, the general point made by my hon. Friend the Member for South Holland and The Deepings is that it may not be sensible to remove a licence and put people out on the street during the interval between the control of a landlord who may not have the money or the will to invest in a property and someone else who may have both. I apologise for being late in Committee; I was having a good lunch.

Andrew Selous: I apologise to you, Mr. Pike, and the Committee for not being at this morning's sitting. I was dealing with housing matters in my constituency with the Minister's colleague, Lord Rooker.
 I support the amendment tabled by my hon. Friend the Member for South Holland and The Deepings. It is sensible because it is not right to apply the full rigour of the licensing system to people who are genuinely just about to get rid of the property. I wish to probe him a little about the words 
''in the process of selling that property''
 in the amendment. I am sure that he would agree that, were someone abusing the system by merely putting up a ''for sale'' sign and not genuinely intending to do anything about it, that should be open to a reasonable challenge by the relevant local authority.

Keith Hill: Let me begin, in marked contrast to the hon. Member for South Holland and The Deepings, who extended a somewhat critical welcome to our new acquisition, by giving a warm welcome to the hon. Member for Teignbridge. I wish to add a slight note of regret to our debate: it seems that his local authority, like that of his colleague, the hon. Member for Ludlow, did not introduce an HMO registration scheme under the Housing Act 1996. It looks as though that may be a bit of a habit of Liberal Democrat authorities. However, the hon. Member for Teignbridge may not share the regulating passion of his more northerly colleagues.

Sally Keeble: Have any Liberal Democrat councils organised discretionary licensing schemes?

Keith Hill: I almost regret to say that they have. Fortunately, in this case, we have identified two members of the Committee whose local authorities have possibly been remiss in such matters.
 Clause 51 provides that a local authority may, if it thinks fit, serve a temporary exemption notice on managers or owners of licensable HMOs who notify it of their intention to take particular steps to ensure that their HMOs no longer require a licence. If a temporary exemption notice is served, the HMO is not required to be licensed under part 2, which covers licensing of HMOs, or part 3, which covers selective licensing. A temporary exemption notice lasts for three months but is renewable for another three months in exceptional circumstances. No more than two exemption notices may be served. 
 The local authority will decide when it is appropriate to grant such an exemption notice, but one example of when that could be used would be when a landlord is in the process of converting a house to single occupancy when the requirement to obtain a licence commences. That is not quite the same as the case to which the hon. Member for Poole (Mr. Syms) referred, but is on the same lines. Clearly it would be absurd in such circumstances for a landlord to be required to obtain a licence if it was clear that it would be needed to cover no longer than a matter of days or weeks. When the exemption is not granted, the local authority must notify the applicant of its decision, the reasons for it, the right of appeal and the period for appealing. 
 Yet again, I find myself speaking to an amendment that would remove flexibility from local authorities. Amendment No. 265, which was tabled by the loyal Opposition, would entitle the owner of a property to temporary exemption from licensing when it was in the process of being sold. Similarly, the purchaser of a property would be exempt from the licensing requirement to make the necessary preparations to obtain a licence. Amendment No. 275 would amend clause 61 and provide a defence for the owner of an HMO against the offence of operating without a licence when that property is being sold. 
 I remind the Committee that the purpose of licensing is to ensure that higher-risk HMOs are properly managed to ensure the welfare of their often vulnerable tenants. As has been mentioned, such an amendment would allow a potential loophole in the legislation. The owner of the property could simply put the property on the market, and thus not require a licence until it had been sold; and the unscrupulous would simply ensure the property was never sold. I think that that is what the hon. Member for Ludlow was grasping for in his example of the extended family. The same sentiment was voiced by the hon. Member for South-West Bedfordshire (Andrew Selous).

Andrew Selous: Does the Minister accept my contention that it would be quite easy to establish a reasonableness test to determine whether there was a genuine intention to sell? We could all spot a seller who was not genuine—one who placed one small advertisement without doing anything about it, for
 example. I would have thought that it would be easy to get around the problem that the Minister presents.

Keith Hill: I hope to be able to demonstrate that the reason for temporary exemptions is to avoid regulation when it is not necessary. If, in the medium to long term, a property remains a licensable HMO, it should be licensed. If there were clear evidence that a property would not continue to be a licensable HMO, a local authority would grant temporary exemption from the licensing requirement. However, we recognise that there may be a potential anomaly when the licensing requirement is introduced. For example, it would seem a little unfair to require a landlord to have a licence when there is clear evidence that a sale is proceeding and a licence would only be in force for a matter of weeks.
 This is very much an implementation issue. When licensing has been in force for a number of years, the owner of an HMO that is in the process of being sold should already possess a licence. We accept that we may need to consider point further and I trust that that gives some comfort and reassurance to the Committee. 
 Clause 204(8) already provides the power to make transitional provisions. We will therefore consider if it might be expedient to provide for some form of exemption for certain categories of HMO which are in the process of being transferred at the time when the licensing requirement comes into force. A temporary exemption for a purchaser would not be granted unless they could show they were no longer going to operate that property as an HMO. That also corresponds to the point made by the hon. Member for Poole. Where a purchaser plans to continue to manage their property as an HMO, it is right that they should be subject to the licensing requirement. There should be sufficient time during the sale process for the prospective owner to take steps to obtain a licence. Clause 61(4) provides that such a person will not be committing an offence of operating without a licence if they have made an application for a licence that is yet to be determined or which is still subject to appeal. 
 I have attempted to respond to the points made during our brief but helpful debate. I hope that my explanations have satisfied the hon. Member for South Holland and The Deepings and I ask him to withdraw the amendment.

John Hayes: The Minister has given an assurance that measured discretion will be used. Given the proper remarks of my hon. Friend the Member for Poole and the hon. Member for Ludlow about the danger of the proposal opening a further loophole, I think that the Committee and the Minister have heard our concern about operating the new regime with discretion in relation to people who are buying and selling houses. Therefore, I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Amendments made: No. 37, in 
clause 51, page 33, line 28, leave out 'county court' and insert 'residential property tribunal'.
 No. 38, in 
clause 51, page 33, leave out line 35.
 No. 39, in 
clause 51, page 33, line 36, leave out 'court' and insert 'tribunal'.
 No. 40, in 
clause 51, page 33, line 39, leave out 'court' and insert 'tribunal'.—[Keith Hill.]
 Clause 51, as amended, ordered to stand part of the Bill.

Clause 52 - Applications for licences

Robert Syms: I beg to move amendment No. 266, in
clause 52, page 34, line 2, after 'the', insert 'appropriate national'.

Peter Pike: With this it will be convenient to discuss the following:
 Amendment No. 267, in 
clause 52, page 34, line 13, leave out 'maximum'.
 Amendment No. 268, in 
clause 52, page 33, line 17, leave out subsection (7).
 Amendment No. 273, in 
clause 56, page 36, line 30, leave out 'local housing' and insert 'appropriate national'.

Robert Syms: We need not dwell too long on this amendment, which continues a theme that we have started to develop. If an HMO owner has several properties in different local authorities, there should be a degree of uniformity across those areas not only in terms of regulation, but in the fees charged. Under the Bill, the authorities will prescribe the maximum: the amendment suggests that the Government or the National Assembly for Wales should set out in guidance what local authorities should charge, so that we do not have somebody paying substantially different fees in different districts, and not understanding why.
 I have always generally favoured a degree of local discretion, so this is a probing amendment, designed to enable the Minister to put on the record his view of the charging regime. Many people involved in HMOs are concerned about the charges for the new regime that the Government are trying to implement.

Matthew Green: The hon. Member for Poole saved himself towards the end of his contribution, when he said that the lead amendment is probing. We cannot support the amendments in the group because they would reduce the ability of local authorities to take decisions for themselves and because the Government or the Welsh Assembly would prescribe the level of the charge. The Bill as it stands states that regulations will specify the maximum fee, so there would be a degree of commonality even under the Government's approach, but the amendment removes the ability to set the maximum fee and would simply set the fee—a fixed fee.
 I can see how different authorities, particularly on the south coast, might charge different amounts, but I suspect that they would not be that different. What concerns me is that there local housing authority of many different sizes and the scheme could place a disproportionate cost burden on some of them. 
 Economies of scale may enable authorities with many HMOs to pay for the cost of administering the scheme even if they set relatively low fees, but other authorities, particularly those in rural districts, will have a relatively small number of properties to license, so setting up the regime will cost proportionately more—before the Minister gets too excited, I should say that I suspect that South Shropshire district council will not have to license any properties. 
 Because the Government would set a national average figure, the burden will be passed on to the local council tax payer if the Bill is passed. I am sure that Conservative Members do not intend their amendment to result in yet another burden on council tax payers and yet another council tax increase.

John Hayes: The hon. Gentleman knows that Conservative members of the Committee have repeatedly stated that the costs that the Bill will inevitably impose on local councils should be properly reflected in the grants given to them. My hon. Friend the Member for Poole and I have repeatedly suggested that the costs will be considerable and that the burden should not be underestimated. However, I make a prediction on which I invite the hon. Gentleman to comment: that if we prescribe the maximum, almost every local authority will regard it not as a maximum, but as a benchmark, and charge it.

Matthew Green: The hon. Gentleman may have a point. We should perhaps consider going further and stop the Government setting a maximum fee at all, instead allowing local authorities to set the fee as appropriate. I am much more prepared to trust the judgment of local authorities, which know their local area better than central Government. After all, if the public do not like what councils are doing, they can throw them out. One reason why nobody votes in local elections is that they do not think that their council has any powers, so it is not worth bothering to vote for it.

John Hayes: The hon. Gentleman knows that, having served in it, I am a champion of local government. My hon. Friend the Member for Poole and I are well acquainted with the importance of the role of local authorities and councillors, but I want the hon. Gentleman to be clear. He is suggesting not only that we should reject my hon. Friend's amendment, but that no maximum should be set. In a fragile marketplace, that will sound a warning bell to every landlord in the country about Liberal Democrat intentions.

Matthew Green: The hon. Gentleman says that it will send a warning bell. Let me put my case another way. I think that most local housing authorities take a responsible view of housing throughout their area, not just the bit that they or registered social landlords control, but the private sector rented accommodation and HMOs as well. He says that councils will say, ''We don't give a monkey's whether there are any private HMOs. We'll stick the charges up and get as much tax as possible off them, so that we can get the money.'' Maybe that is what Conservative-controlled local authorities would do, but many other authorities are far more responsible than that.
 The Government's approach, which is less prescriptive than that proposed by the Conservatives, is that nanny knows best. Clearly the Conservatives now back a nanny state, which worries me considerably. They have made it plain that, in authorities where the scheme proves expensive because there are very few HMOs to be licensed, it would have to be paid for through increases in council tax. 
 There are severe problems in what the Conservatives are saying. I hope that the Government set the maximum fee at a level that enables them to cover the costs of the smaller authorities and, through guidance, indicate that they should not do anything when setting fees other than to meet the costs. That may be the way around the problem, but my concern is that the Government will set a maximum that will suit the big cities, while the smaller local housing authorities will not be able to meet their costs and will have to go elsewhere. 
 As for meeting costs through Government grant, I do not think any local authority or many local voters believe that any Government properly compensate local councils through that grant when they give them a new duty. While this Government have not been great in that regard, I am not sure that it is an issue that the Conservatives will want to probe in too much detail. We do not support the amendments as they may have the effect of forcing up council tax levels in small authorities.

Keith Hill: Before I deal with the amendments and the particular points raised by hon. Gentlemen during the debate, it may be helpful to the Committee if, as I have done in the past, I put the purposes of the clause and the effect of the amendments on those purposes into context.
 Clause 52 provides that an application for a licence must be made to a local authority in accordance with the requirements specified by that authority. In other words, subject to the regulations, an application must be made in accordance with the requirements specified. Importantly, the local authority can fix a fee for the consideration of licence applications that takes account of all its costs in running the licensing scheme. I will return to that point in a second. 
 Clause 52(5) gives the appropriate national authority the power to make regulations specifying various matters about licence applications and how they should be made. That includes the contents and form of the application forms, the manner in which applications are made and the maximum fees that a local authority can charge. I have forwarded to Committee members a note of policy intent on what we expect the regulations to say. I should emphasise that that will provide some standardisation across all licensing regimes, an issue that we have frequently debated in this Committee and which will be welcome to the Committee, in order that landlords do not face completely different applications for different types of property in different parts of the country. 
 I reassure Committee members that I am as keen as everyone else to ensure that landlords' costs are kept 
 to a minimum. However, we also wish the licensing regime to become self-financing through the fee revenue received. We have already carried out initial work with the Local Government Association on the issue. The association represents all types of authorities including the smaller ones and I have no reason to believe—as the hon. Member for Ludlow alluded—that the interests of the smaller authorities have not been taken into account in the course of the initial work. 
 As a result of that initial work, we expect fee levels to be capped at about £110 per unit—for example, per habitable bedsit. For a five-year licence, that amounts to a little more than 40p a week. I hope that the Committee will agree that that is not an unreasonable amount.

Robert Syms: The Minister has set out a likely maximum of £110. Is that at all variable between districts? For example, in a debate earlier today we talked about a property block in London. Let us consider a block of 100 properties, in which an inspection might be an all-day, two-day or even three-day job, which is rather different from the inspection of a block that has just a few people in it in a small town. Will the fee use a broad-brush approach so that there may be some inspections where the local authority loses money and some where it makes money? The fee of £110 would not be much for a large block in London but it might be an awful lot for a small place in Prestatyn. Is it a set fee for the whole of the district, or would there be some variation depending on the sort of property or on the amount of work that a local authority has to do?

Keith Hill: I thought that the hon. Gentleman's reference to the quality of property in Prestatyn was gratuitous, and not in accordance with the generous and happy spirit that for the most part has prevailed in the Committee. I am convinced that there are some excellent properties in Prestatyn, which would be worth the full £110.

Chris Ruane: Prestatyn is in my constituency. Denbighshire county council tried to operate a licensing scheme and was charging £60 per room. Surely that is more in line with the cost of thoroughly inspecting a property? Does the Minister not think that we are selling ourselves short at £110 per house?

Keith Hill: My appetite for a visit to Prestatyn grows with each of my hon. Friend's interventions. However, we are talking about a maximum—a capped sum.
 I am grateful for the question put by the hon. Member for Poole about the possibility of variability across a district. That contributes to what I might describe as a mutual learning process in this Committee. The answer to his question is yes. There is provision for exactly that variability across districts.

Matthew Green: The Minister is in danger of displaying the Office of the Deputy Prime Minister's new enthusiasm for capping.
 Did the Minister say that £110 is the maximum per bedsit? Would a property with several bedsits in it—several independent households—incur £110 per 
 household, or would the £110 be imposed on the property, which could vary considerably in size? If the charge is per bedsit, the maximum for a six-bedsit property would be £660, rather than £110.

Keith Hill: The hon. Gentleman is absolutely right. It is important that we are clear. We are talking about a charge per unit—per habitable room. However, I remind the hon. Gentleman and the Committee that there is local flexibility, and that the fee is a maximum fee; any local authority can charge less. The maximum fee will be set through secondary legislation, on which we will consult in due course. As part of their desire to keep fees low, the Government have already expressed their willingness to assist local authorities with start-up costs relating to the introduction of licensing. We estimate that about £13 million will be made available for that.
 I recognise that amendments Nos. 266, 267 and 268, tabled by the official Opposition, are probing amendments, but I point out that they would remove the discretion for local authorities to set a fee appropriate to their local circumstances; they would impose a fixed fee across all localities. I accept the case for seeking as far as possible a common approach among local authorities, but on this matter the case for local discretion is strong. A flat-rate national fee would have to be set at a level that ensured that all local authorities could finance their licensing regimes. The average cost of running schemes is likely to vary considerably, and we want local fees to reflect that. It would not be right for a local authority to make a profit from its licensing scheme. We expect local authorities to set much lower fees in certain circumstances—for example, for landlords who are already part of voluntary accreditation schemes; the cost of licensing such landlords would inevitably be lower.

Richard Younger-Ross: Will the Minister give way?

Keith Hill: Of course, although I am not used to gazing that far down the Room.

Richard Younger-Ross: The Minister says that he does not think it right that the authorities should make a profit from the fees. Will he impose regulations to prevent them doing so?

Keith Hill: It is not our intention to introduce a regulation to that effect, although it is fair that the licensing fee should cover the cost of the operation of the scheme in a particular locality. That reinforces the point that these are horses-for-courses costs for specific localities: we are intent, in the spirit of new localism, to leave the matter to local authorities. Such an approach will also be an incentive for good landlords to work with local authorities in the run-up to the introduction of licensing: that would benefit all involved.

Peter Pike: Order. I am getting the impression that the Minister needs inspiration.

Keith Hill: I dare say that, not for the first time, it will wing its way to me in due course. Here it comes:
 the US cavalry rides to the rescue. If I need to correct anything that I have said, I will do so. We are pretty relaxed. I am advised that the matter to which the hon. Gentleman referred is in the Bill already. We should all have known that. It is in clause 52(7). I was going to deal with that.
 I return to amendment No. 273. The hon. Member for Ludlow chastised the Conservative amendments for their centralising tendency. He is right, but I have sometimes had occasion to remark that the Liberal Democrats are not immune from the same regulatory tendency. The amendment would constrain local authorities and would require that the conditions that they could impose could only be those that the appropriate national authority considers to be appropriate. The amendment therefore seems to presume that the appropriate national authority would prescribe in a more detailed way than is currently provided for in clause 56(2) and schedule 4. 
 Unamended, the clause is about the scope that local authorities have for imposing conditions on a licence. Once again, the official Opposition want to restrict the scope of local authorities and require central Government to make the most prescriptive provisions. The scope that local authorities may have is indicated, and therefore somewhat limited, by clause 56(2). Central Government have been most prescriptive in relation to subsection (3) and schedule 4, which refer to the conditions that a licence ''must'' have. 
 The amendment would mean that the Government would also prescribe an approved list of conditions that might be included by a local authority in a licence. We do not see that the appropriate national authority is better placed than local authorities—as moderated by the housing tribunal on appeal—to determine the sort of conditions that are applicable, and to do so for all local authorities. 
 In light of those observations, I invite the hon. Member for Poole to withdraw his amendment.

Robert Syms: We are learning a lot about the Bill's implications. The £110 charge per bedsit threw a lot of light on what local authorities could charge. Somebody inspecting a large property in London with 100 or 200 properties could charge £15,000 or £20,000 for doing so, compared with £200 or £300 for a small property. Presumably, if an inspector went into a large property and found that in a number of flats everything including the wiring was fine, it would not be necessary for them to look into every flat, so it would probably be more profitable to inspect 100 or 200 properties because one would quickly get a clear idea of whether the block was well maintained or able to meet the standards. I thank the Minister for the points that he has made. He mentioned that 40p per week was not an awful lot per property, and that it is payable for five years. On that basis, I am minded to withdraw the amendment. I am grateful to the Minister for enlightening us on that part of the process. I am sure that we will return to the matter, and I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 52 ordered to stand part of the Bill. 
 Clause 53 ordered to stand part of the Bill.

Clause 54 - Tests as to suitability for multiple occupation

John Hayes: I beg to move amendment No. 269, in
clause 54, page 35, line 20, after second 'standards', insert 
 'relating only to health and safety'.

Peter Pike: With this it will be convenient to discuss the following:
 Amendment No. 257, in 
clause 54, page 35, line 25, leave out 'and'.
 Amendment No. 258, in 
clause 54, page 35, line 26, after 'facilities', insert ', and'.
 Amendment No. 259, in 
clause 54, page 35, line 26, at end insert— 
 '(iv) bedrooms and sleeping areas,'.
 Amendment No. 270, in 
clause 54, page 35, line 29, at end insert— 
 '(c) standards as to the susceptibility to fire hazards'.

John Hayes: Amendments Nos. 269 and 270 define the tests as to suitability for multiple occupation more precisely. They identify health and safety considerations—which are at the heart of the purpose of parts 1 and 2—at the very core of the clause. Amendment No. 270 returns us to fire, as it specifically adds the standard of susceptibility to fire hazards to subsection (4).
 In our consideration of part 1, we discussed hazard and risk of fire in relation to health and safety. In our discussion of part 2, it is important to be mindful that the licensing regime should be consistent with our considerations in Committee and the way in which the Bill reflects those subjects. The more explicit we can be in the Bill, the better. Our amendment is certainly explicit: it relates the tests for susceptibility of multiple occupation specifically to those health and safety issues. Fire has been used on several occasions to justify some of the Government's proper concerns about HMOs and housing standards in general. It would be bizarre if the Minister were to reject an amendment that makes large and specifically addresses the very concerns that he has highlighted. 
 The amendments are helpful and entirely consistent with the purpose of part 2, and on that basis I would be amazed if the Minister were to resist them.

Matthew Green: Three amendments in the group stand in my name and those of my hon. Friends. Although I have considerable sympathy with amendment No. 270, I have none for amendment No. 269, which would, as I understand it, limit the prescribed standards to those relating only to health and safety. The difficulty is that some of the issues related to suitability do not necessarily come under those two headings, or it is difficult to prove that they do so.
 My amendments Nos. 257, 258 and 259 are essentially one amendment. All deal with overcrowding, which has been touched on before. 
 Many people—including some Conservative Members—have spoken about overcrowding and its associated problems. These problems relate not only to safety or health, but to the educational attainment of young children, people's ability to put in a good day's work if they have not slept all night, and similar issues. 
 I hope that the Government might be moved to realise that they have an opportunity to make an impact on overcrowding. Including the number, type and quality of bedrooms and sleeping areas in the standards that can be prescribed would ensure that when an HMO is licensed, it cannot subsequently be overcrowded. I would have thought the Minister would want to make sure of that, but as things stand there is nothing to stop an HMO being licensed and for conditions then to become overcrowded. Then, we would have to revisit the 1935 legislation that there have been so many calls to adjust.

John Hayes: All that would be fine if previous amendments on overcrowding had been accepted, but the fact is that the attempts of the Opposition—and of some Labour Members—to insert overcrowding as a central consideration in earlier parts of the Bill were largely resisted by the Minister, although I acknowledge that the new fitness standard makes some reference to overcrowding. The hon. Gentleman criticises our amendment 269, but surely he does not assume that clause 54(4)(a)(i), which refers to
''bathrooms, toilets, washbasins and showers''
 is about aesthetic considerations? We are not talking about the colour of the tiles—we are talking about health, safety and hygiene. Are not health and safety implicit in the clause, and would the clause not be weakened by our amendment being rejected out of hand?

Matthew Green: My point is that the amendment would obstruct the amendments that I have tabled, which relate to the number and quality of bedrooms and sleeping areas, because it would be difficult to prove the health and safety grounds of overcrowding. Many problems of overcrowding cannot immediately be ascribed to health and safety categories. Although overcrowding may have health and safety implications, they would not be the sole criteria. If the Minister were foolish enough to accept amendment 269, it would prevent overcrowding legislation being brought in. As the Bill is framed, it would allow my aims to be achieved through secondary legislation, but I want them on the face of the Bill because I—and other hon. Members, I am sure—would prefer to see the provisions in statute, rather than have to wait for secondary legislation.

Sally Keeble: Does the hon. Gentleman accept that overcrowding is relevant to clause 113 onwards, and that it might be possible to do something there? I have already tabled an amendment on the matter.

Matthew Green: There are certainly overcrowding issues to be dealt with in relation to clause 113, and if the hon. Lady waits patiently, she may well discover that we support her amendment. That is probably enough to ensure the Minister will not accept it, though perhaps I am being too cynical.
 We are making another attempt to get the overcrowding addressed in the Bill, and dealt with at the very point when we have the greatest control over a property—the point at which a decision is made on whether to license an HMO.

John Hayes: The hon. Gentleman is putting the cart before the horse. He is right about overcrowding—it is a critical issue. Other members of the Committee and I have made the point that he now makes very eloquently. Overcrowding has a direct relationship with health and safety and all of the other issues that we are talking about. By talking about health and safety, we encompass a range of conditions that have a deleterious effect on the health, safety and happiness of people living in HMOs.

Matthew Green: The hon. Gentleman is trying to stretch his point: he has discovered that his amendment works against dealing with overcrowding, and he is backtracking fast. Other Committee Members share my view that relating overcrowding only to health and safety would restrict the ability to control overcrowding. Although under the Bill the Minister may prescribe other things later on, I would like the number of bedrooms and sleeping areas to be included. If he does not accept that, there will be great difficulty, because he will be saying that the Government are prepared to license overcrowded HMOs. Unless he tells the Committee that there is another route by which the problem is going to be dealt with, we will find that he is saying that overcrowding in HMOs is acceptable.

Richard Younger-Ross: I apologise for not attending the meetings last week and this morning. Constituency matters that had been arranged for some time, including leading a delegation to Brussels, precluded my being here. [Hon. Members: ''Ah!''] I am so pleased to receive such a warm welcome.
 In speaking in favour of the amendments to which my hon. Friend the Member for Ludlow spoke and opposing the Conservative amendment it is logical to say that sleeping accommodation should be included in the list of accommodation standards—and not only because it is, up to a point, a health and safety matter. If that is not included, any architect who is asked to design a building or carry out a conversion will sacrifice the living area, because of the size standards for bathrooms and toilets that might be imposed on the accommodation. I say that from experience. Before I became a Member of Parliament, I spent many years in different architectural practices. If an architect is asked to squeeze a quart into a pint pot, they will look at the standard and try to prune whatever they can. The consequence of such a requirement would be that rooms for sleeping accommodation would be reduced in size. 
 As my hon. Friend the Member for Ludlow said, if there were a standard, it would simply stop overcrowding. The standard would say how many people there could be in so many square metres of floor space. Without a standard, it would be easy to go to a Japanese box system, which would be quite healthy because a fan could be positioned at either 
 end, under which there could be a box measuring two metres long, one metre high, one metre wide. It would be easy to say that that is a space that is adequate for sleeping in without any problems at all. However, I would not consider that to be adequate housing, and it would not be suitable for anyone to live in. It is not much bigger than the cardboard boxes on the streets. 
 We establish the standards for accommodation in other cases. We say that there shall be so many square metres per resident in care homes. If that is good enough for elderly people, why is it not good enough for people who are vulnerable, on low incomes and living in an HMO? Perhaps the Minister could seriously consider including in this Bill a standard that includes sleeping and living accommodation.

Keith Hill: This interesting debate was marked by the maiden speech of the hon. Member for Teignbridge, come hotfoot from his sally to Brussels, where he ought to have had the opportunity to observe many houses in multiple occupation. Indeed, I confess that I was once the tenant of such an HMO. I remember very well my days as a poor student in a garret in the centre of that city. Gosh, I almost had myself going then, but now is not the time for nostalgia or reminiscences, so back to clause 54.
 Clause 54 provides that the appropriate national authority may, by regulations, prescribe national minimum standards of amenities or facilities that must be available to render a house in multiple occupation reasonably suitable for the number of occupants. Subsection (4) sets out the matters that may be prescribed in the regulations. They include the adequacy of the number, type and quality of bathrooms, toilets and washing, cooking and laundry facilities. The Government intend to consult on those prescribed standards before laying the instrument before the House. 
 Subsection (2) provides that a local housing authority may require different, but not lower, standards than are prescribed by the regulations. It is important that local authorities can tailor that aspect of the licensing regime to reflect the individual circumstances of the housing market in their areas, the particular features of the HMOs or the needs and requirements of the occupiers. If, for example, a house meets the minimum standard of the ratio of the number of bathrooms to occupiers, but the available living accommodation in the HMO is not suitable for that number, the local authority may license the house only for the number of persons for which the accommodation is suitable. 
 I wish to make it clear that, if a local authority wished to impose standards above those that are nationally prescribed, they must be reasonable and, in particular, relate to the suitability of the HMO. It would therefore not be appropriate for a local authority to be required to take on board the perhaps far-fetched example that taps in the bathroom were gold-plated.

Robert Syms: The Minister just pointed out that the authority would license a property for the number of people who were in it. However, it would license the
 landlord and it is the landlord who would have tenants. The tenants might have people in the property of whom the landlord was not aware. That does happen, although I suspect more often in bedsit-type HMOs. Could a property be overcrowded because the tenants allowed people into it, resulting in the landlord losing his licence because he was unaware of those living in the property?

Keith Hill: The hon. Gentleman makes a reasonable point. It is conceivable that a local authority, perceiving that there was over-occupation of a property, would bring a case against the landlord. The case could only be brought against the landlord. I hesitate to trespass on those areas that belong to m'learned friends but, in those circumstances, I imagine that the landlord would have the reasonable defence of ignorance.
 The circumstances would have to be proved—after all one of the conditions of the licence is good management of the property and, if a landlord were to allow over-occupation to persist for the reasons given by the hon. Gentleman, that would raise a question mark about the landlord's management of the property. To some extent, I am speculating, but I imagine that that would be the way in which the appropriate court or tribunal would want to examine the situation. Indeed, it would be the court that carries out such action, because permitting over-occupation of a property is a criminal offence, which I shall deal with in due course.

Karen Buck: I wondered whether it was correct that tenants commit the offence of overcrowding a property. That is consistent with the Housing Act 1935, which is one reason why that legislation is barmy. Clearly, there is a need for some consistency. Although I am not necessarily sure that there are likely to be any instances such as those outlined by the hon. Member for Poole, we may find a conflict of interpretation between that aspect of the overcrowding law and the matters under discussion.

Keith Hill: Not for the first time, I am grateful for my hon. Friend's extraordinary expertise in these matters. If I may say so without excessively prejudicing the situation, I am inclined to agree with her observation: it is slightly odd that it should be the tenant who is found to be at fault in those situations. However, it is clear that the Bill places a responsibility on the landlord, and I hope to expand on that as quickly as possible.
 A person who has been refused a licence, or is aggrieved by a condition imposed in the licence because the house does not conform to local standards, will have a right to appeal to the residential property tribunal against that decision. 
 Amendment No. 269 would require that the standards prescribed under the clause relate only to health and safety standards, but the clause is intended to deal with standards of facilities and equipment. It is about the number of stairs that a person has to climb to use a shared bathroom or toilet and with how many others they must share it. They may not be matters that rate highly in health and safety terms, but they are 
 important facilities and equipment that a tenant should expect in this day and age. 
 Under the amendment, standards set under the clause could deal with facilities and equipment only if they also related to health and safety, which are matters for the housing health and rating system and the enforcement regime under part 1. The provisions of part 1 are intended to work in tandem with licensing, not least through the provisions of clause 44. The standards of facilities and equipment prescribed under the clause will to a fair extent be different from, and additional to, what is provided in part 1, but fire equipment could be prescribed under the clause. 
 Amendments Nos. 257, 258 and 259 would include within the scope of the national prescribed standard regulations that the appropriate national authority may set standards as to the number, type and quality of bedrooms and other sleeping accommodation in HMOs. The hon. Member for South Holland and The Deepings was right to say that hazards under the health and safety rating system are at the heart of the licensing provisions, but equally at their heart is the purpose of licensing, which is to ensure that HMOs are not overcrowded and that they have adequate facilities for the number of persons residing in them. It is a fundamental condition of the grant of a licence that the HMO is licensed for a specific number of occupants. The observations of the hon. Member for Ludlow in that regard were right. Clause 53(3)(a) makes provision to that effect. 
 The local authority, having regard to the size, layout and amenities of individual rooms, may also determine the maximum number of persons who may occupy them. That can be set as a condition of the licence. In deciding the suitability of the house or the number of occupants, the local authority must have regard to two factors: first, whether the living accommodation is reasonably suitable for the number of occupants; and, secondly—this is important—whether the house meets the standards required for multiple occupation by the number of persons for which it is licensed. It is for the local authority to decide, under clause 53(4), having regard to the suitability tests that I referred to previously, how many persons may be permitted to reside in the HMO. 
 The Government are aware that some HMOs will not be suitable for the number of occupants at the time that they are required to be licensed. That is why a licence condition may be imposed to require work to be done within a specified period to bring the house up to the required standard for the number of occupants. If an HMO cannot be rendered suitable for the number of persons living in the property at the start of the licence, the local authority may limit the maximum number of occupants to a figure reasonably suitable to reside in that house. If the conditions are so bad that a licence ought not to be granted at all, the authority must make an interim management order. We shall come to those in our later consideration of the Bill. Any local authority decision to refuse to grant a licence or impose conditions on a 
 licence will, as I have previously said, be subject to appeal. 
 I hope that I have sufficiently assured the hon. Member for Ludlow that the Government's proposals will ensure that HMOs are not overcrowded and are equipped with adequate amenities and facilities for the number of occupants. Indeed, we propose in clause 61(2) that it should be a criminal offence, punishable by a fine of up to £20,000, for a person to permit a licensable HMO to be occupied by more persons than it is licensed to accommodate. That is a fair sign of our seriousness.

Matthew Green: I realise that much of the Bill is an advance, which is why we welcome the licensing of HMOs. There are indeed powers in the Bill to deal with the total number of people concerned. However, although the Government are happy to set a maximum limit for the cost of licensing throughout the country, I am slightly bemused that they are not prepared to set some minimum standards. We want minimum standards applied throughout the country on the quality of property, not on the quality and quantity of the sleeping areas. That should not be left to local variation.
 I can envisage two London authorities having identical properties on either side of a street and one accepting that a certain number of people may occupy a house and the other allowing a different number. To the average man on the street, that would make no sense at all. It is in exactly this area that we need national consistency and national minimum standards.

Keith Hill: I do not think that the hon. Gentleman is right in that regard. To take one obvious example, the nature, size and type of properties will vary from locality to locality. To that extent, it would seem unlikely that in a conurbation such as London one would find two adjacent authorities with wildly differing standards. However, I put it to the hon. Gentleman that the type of property that might be found in a seaside resort with a grand Victorian or Edwardian history may be very different from the sort of property found in a city with a history of small workshop enterprise or textile activity.
 It is one thing for the Government after appropriate consultation to say that there should be x number of bathrooms per HMO for y number of residents as an absolute minimum standard. That is fundamental to hygiene and health. It is quite another matter to second-guess local housing markets and the conditions, layout and size of HMOs in that market, in order to require the number of sleeping rooms to be provided in every case and every circumstance. That is a matter for the judgment of the local housing authority, using its own expertise and knowledge of individual circumstances.

Richard Younger-Ross: If the Minister will not prescribe the exact sizes in national standards, would his Department lay down guidelines for authorities on what is reasonable so that they have some framework in which to act?

Keith Hill: In all matters of guidance and regulation, as the hon. Gentleman will have heard in the course of our deliberations so far—I am not making a cheap jibe—the Department engages in extensive consultation with appropriate organisations, local authorities, professional bodies and so on. I can certainly reassure him that we will consult extensively before we introduce guidance in such areas.
 Amendment No. 270 provides for fire safety standards to be prescribed. That matter also relates to the part 1 health and safety regime. So far as fire equipment is concerned, what may be prescribed under clause 54 will complement local housing authorities' powers under part 1. 
 For those reasons, I ask the hon. Member for South Holland and The Deepings to withdraw the amendment.

John Hayes: The Minister made a compelling case in respect of the need to extend the regime beyond the confines of health and safety, although I remain convinced that we should never allow health and safety considerations to be downgraded when it comes to the way in which we perceive such matters. The link between overcrowding and health, for example, is one of the most powerful arguments that can be made about the undesirability of overcrowding. I accept that there are also quality of life issues. The Minister did not use that phrase, but he certainly implied that there were such issues when talking about the characteristics of HMOs. Such issues might also need to be taken into account, and are dealt with in this part of the Bill.
 However, the Minister made an unconvincing case about amendment No. 270. The argument for including ''fire hazards'' is entirely consistent with part 1 of the Bill. Indeed, he said that what is included in the Bill complements the new rating system. I would have thought that if this part of the Bill, which relates to the licensing regime, is to work in tandem with part 1, it can only be helpful to include in it an analysis of fire hazards. Will the Minister intervene and justify once again his argument for resisting the amendment? He might go so far as to say that the Government will consider it and might bring it back at a later stage. At the very least, the argument for the amendment has, I hope, been reasonably well made, but it has been virtually ignored by the Minister.

Keith Hill: The hon. Gentleman invited me to intervene. The clause is concerned with facilities and equipment, and fire appliances in HMOs are, as he will be aware, entirely covered under part 1. It is unnecessary to put such requirements into the Bill at this point when they are already adequately covered.

John Hayes: I hear what the Minister says, but this part of the Bill specifically states that the housing authority needs to be satisfied, for the purposes of clause 53, that the house is reasonably suitable for multiple occupation. There is proper consideration of washbasins, showers and bathrooms, areas of food storage, preparation and cooking, and laundry facilities and so on, but there is no mention of the safety equipment—smoke alarms are a good example—that might reasonably be expected in an
 HMO to deal with a fire hazard. It is true that considerations relating to fire hazards are dealt with extensively in part 1 and in the guidance. We have debated those provisions at length. However, it would be desirable to refer back to them at some stage in this part of the Bill. I will put it no more strongly than that.
 I am yet to be convinced, but I trust that the Minister has noted the perhaps untypical vehemence with which I have pressed my point and I hope that he will give the matter further consideration. I will resist my instincts to press the matter because I know that my hon. Friends feel that we need to move on and consider the Bill with alacrity. On that happy note, I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn. 
 Clause 54 ordered to stand part of the Bill.

Clause 55 - Tests for fitness etc. and satisfactory management arrangements

Robert Syms: I beg to move amendment No. 271, in
clause 55, page 35, line 34, at end insert— 
 '(1A) On application for a licence, ''P'' will be required to make a full disclosure of any recorded convictions on the sex offenders' register to the licensing authority. 
 (1B) Before the local authority awards a licence it will be required to validate both the identity of ''P'' and information supplied by ''P'' with the national sex offenders register. 
 (1C) Every HMO manager within an authority's area of jurisdiction will be required to report to that licensing authority any sexual offence conviction gained since the award of an HMO manager's registration. 
 (1D) Every year, local authorities will be required to check the names of all HMO managers within the area of their jurisdiction against the sex offenders' register.'.

Peter Pike: With this it will be convenient to discuss Amendment No. 272, in
clause 55, page 35, leave out lines 43 and 44.

Robert Syms: We are testing the requirements in clause 55 to which the housing authority must pay regard. They include dishonesty, violence, drugs, and discrimination on the grounds of sex, colour, race and ethnic or national origins. The amendment states:
''(1A) On application for a licence, ''P'' will be required to make a full disclosure of any recorded convictions on the sex offenders' register to the licensing authority.''
 Under the Bill, a drug offence might be a youthful indiscretion at university in the time of peace and love and the Vietnam war, which the Minister for Housing and Planning probably remembers very well. However, the Bill does not set out anything to do with sex offences, although most of them could be included under the general heading of violence. We all know that people who have responsibility for HMOs may have vulnerable people within their property. The Minister should be required to explain why such offences were not included in the list of subjects in the Bill. 
 Amendment No. 272 is a probing amendment about the grounds on which an authority has to pay regard to some of the things that I mentioned earlier. Will they have to be tested in court, or will an authority that refuses a licence be on firm ground? 
 Would someone who wanted to have a licence be able to go to court to overturn an authority's decision? How strong can a local authority be in refusing a licence? 
 Clause 55(2)(d) refers to a code of practice. I have not yet seen that code of practice. It is possible that the Minister will say that it has been produced and flash a document in front of the Committee; otherwise, we are concerned about the fact that we are debating the grounds on which a local authority can refuse a licence when we do not know the details of the code. 
 Amendment No. 271 flags up the fact that we consider sex offences to be an important thing for a local authority to take into account when they are thinking of giving somebody an HMO licence. We want the Minister to set out the situation in that regard, and to describe how the Government feel about this important issue.

Matthew Green: I rise in support of Conservative amendment No. 271. It is right that one of the considerations made about a person managing an HMO is whether they are on the sex offenders register. They would not be automatically barred, but that fact should be taken into account.
 I have a related question about someone having a past offence for smoking cannabis, which, under these regulations, would have to be brought forward. People might have been caught doing that 20 or 30 years ago when it was a class B drug. It is now a class C drug. [Hon. Members: ''Not until Thursday.''] Is there any guidance as to how local authorities should take account of there being something that is a lesser offence than it once was?

John Hayes: I rise to support my hon. Friend the Member for Poole. Landlords do not exactly have a duty of care, but they do have an important responsibility when dealing with HMOs, which are often occupied by vulnerable people. We have spoken a lot about help and protection for such people, and this amendment is an important precaution.

Matthew Green: I should add that a landlord is often one of the few people with keys to a person's property and therefore often has access either to vulnerable adults or to young children when parents are away.

John Hayes: That is precisely the sort of thing that I had in mind. As I said, landlords have particular responsibilities and duties in relation to the way in which they interact with their tenants. Not all such duties are prescribed by law, and nor should they be. Some are about social interaction, about which one cannot be prescriptive. However, for the sort of reasons mentioned by the hon. Gentleman, landlords are often in a powerful position over people who may not be sufficiently confident, mature or strong to represent their own interests properly. The more protection that we can give in the form that my hon. Friend the Member for Poole suggests, the better.
 Our amendment is a helpful addition to the Bill, and the Minister will probably accept it now. If he does not, the Government should consider the matter again. If managers were to be tested for previous 
 convictions for drug offences or for offences of discrimination on the grounds of sex, colour or race, but not simultaneously for sex offences—possibly against children—or other serious matters, that would be poorly received. I strongly endorse what my hon. Friend has said, and I hope that the Minister will take it seriously. If he cannot grasp it with both hands immediately, I hope that he will think about it again.

Keith Hill: I should say at once that I have no intention of being sucked into the drugs issue, at the level of reminiscence or debate, other than to say that I have the honour to represent 40 per cent. of Brixton in Parliament, and that I do not take the same line on issues of reclassification as my hon. Friend the Member for Vauxhall (Kate Hoey), whose position is well known. In other words, I am content with the Government's decision.
 I want to come on to the important issues raised, but it would be helpful if I set out as briefly and as rapidly as possible the purposes of the clause, which brings us on to the issue of the fitness and propriety of the landlord. That will become an important issue as we go on to discuss part 3, which deals with selective licensing. 
 Clause 55 sets out the evidence that a local authority has to consider when addressing the question whether a person or a relevant associate is fit and proper to be a licence holder or a manager. There are four categories of such evidence. First, one must ask whether the person has committed an offence involving fraud, dishonesty, violence or drugs; secondly, whether they have practised unlawful discrimination in business on grounds of sex, colour, race, ethnic or national origins or disability; thirdly, whether they have contravened housing law; and fourthly, whether they have breached any applicable code of practice approved under clause 171. I pause on the issue of the code of practice, which was raised by the hon. Member for Poole. I have a speech on the subject at a later stage, but I will circulate a note to the Committee that provides as much detail as is reasonable about the code of practice. I could undertake to circulate the code to the Committee but, frankly, I have no idea how substantial a document it is. 
 Clause 55(3) means that when deciding whether the licence holder or manager is fit and proper, the local authority can consider relevant evidence about offences committed by a relevant associate. Section 24(2) of the Consumer Credit Act 1974 sets a precedent for that. A landlord may seek to have a spouse or some other close associate act as a manager on his behalf, yet the nature and closeness of that association could prove to be a good reason for not regarding that other person as fit and proper. 
 Subsections (5) to (7) set out the matters to be addressed when considering whether the management arrangements—the competence of the manager, management structure and funding—for an HMO are satisfactory. 
 Amendment No. 271 would specifically require a sex offender to disclose recorded convictions on an application for a licence to act as an HMO manager and on subsequent applications. It would require a local authority to check on an application for licensing and to check annually whether any proposed or existing HMO managers were sex offenders. Subsection (2) lists a number of cases in which a person might not be considered fit and proper to manage an HMO. A sex offender could easily fall within those categories, but they do not have to be expressly covered by the categories listed in subsection (2) to be deemed unfit to be an HMO manager. Subsection (1) makes it clear that the list is not intended to be exhaustive, hence the words ''among other things''. 
 I say to the hon. Member for Poole and to other hon. Members who have intervened that I accept that a local authority must be aware as best it can of the actions of licensed managers that might subsequently make them unfit for licensing. I am not sure that, in addition to the other new obligations in the Bill, I want to place upon a housing authority the formal burden of an extra annual check on sex offenders. 
 I will consider the matter—I understand the force of the argument—but if we were to add the provision, we would do so technically and in a different way the one proposed in the amendment. I undertake to the Committee to give further consideration to add sex offences to the list in subsection (2). 
 If the purpose of amendment No. 272 is to ask whether a local authority's decision on a licence can be tested in court, the answer is yes. I hope that I have provided a reasonable response to the Committee and I invite the hon. Member for Poole to withdraw the amendment.

John Hayes: The Minister has made a sensitive and intelligent response to the arguments and hon. Members on both sides of the Committee will be pleased that he has undertaken to consider the matter afresh. I am not rigid about the wording proposed in the amendment—to be so would be pedantic. He clearly understands the power and responsibility that landlords will have over vulnerable tenants.

Robert Syms: I beg to ask leave to withdraw the amendment.
 Amendment by leave withdrawn. 
 Clause 55 ordered to stand part of the Bill.

Clause 56 - Licence conditions

Matthew Green: I beg to move amendment No. 260, in
clause 56, page 36, line 38, leave out paragraph (b) and insert— 
 '(b) conditions requiring reasonable steps to be taken to address any nuisance or annoyance caused to others by persons occupying or visiting the house;'.
 I am very grateful to Shelter for suggesting the amendment, which would amend subsection (2)(b). The amendment would require a landlord to include a 
 written statement of terms within a tenancy agreement under paragraph 1(5) to schedule 4 relating to the conduct of the occupier and any visitors to the property. The inclusion of such terms in tenancy agreements would align private landlord practice for HMOs with standard practice of most social landlords. 
 The amendment would also include a provision for a private landlord to detail in writing what action they will take to address any nuisance, annoyance or harassment caused to others or the unlawful use of the house by persons occupying or visiting the house. Again, that would go some way towards aligning the practice of private landlords with that of social landlords who, under the Anti-social Behaviour Act 2003, must produce policies and procedures to deal with antisocial behaviour. 
 The amendment relates to the reference to private landlords controlling the behaviour of their tenants in clause 56(2)(b). That term is too broad to be effective and goes beyond the level of responsibility that local authorities have to tackle the behaviour of their social housing tenants. The role of a responsible landlord is to manage the property and the tenancy. However, we believe that a landlord's interest in the behaviour of tenants or their visitors could easily constitute harassment unless it relates directly to the enforcement of a contractual obligation. 
 That is the reason for proposing the amendment: to bring the provision broadly in line with other provisions in the social housing sector. It would ensure that the word ''controlling'', which seems far too strong and puts too onerous a duty on landlords, is removed and replaced with something more acceptable.

Sydney Chapman: I apologise for being late, Mr. Pike. I was invited to return from the Council of Europe in Strasbourg to take part in an event in the House.

Peter Pike: Order. We all know that you were ordered back to take part in this Committee, Sir Sydney.

Sydney Chapman: I also apologise to the hon. Member for Ludlow. I was hoping to intervene on him to save the Committee a little time.
 Six sets of conditions are set out in clause 56(2) and although the hon. Gentleman explained where he is coming from—via a good Shelter briefing, I might add—I am slightly perplexed about why he wants to introduce the word ''reasonable''. We have had this debate before, so I need not rehearse the arguments, but the other five conditions are specific and I cannot see why he now wants to introduce the word ''reasonable'' because that can mean different things to different people. It would be helpful to the Committee if the hon. Gentleman explained his rationale.

Matthew Green: Far be it from me to be in the position in which Ministers often find themselves of having to defend the word ''reasonable''—an argument that seems to plague Ministers in every Committee of which I have been a member. We are
 discussing ways of dealing with antisocial behaviour. That is the purpose of the clause. There is a limit to what a landlord could do to control the antisocial behaviour of tenants, so the word ''reasonable'' refers to what reasonable steps can be taken. That is slightly different from prescribing to a landlord exactly what they will do to control their antisocial tenants. That is difficult to detail precisely and a test of reasonableness is needed, which is what I believe Ministers have to trot out every time the question is asked.

Richard Younger-Ross: Is it not the case that the word ''reasonable'' is needed because something that is reasonable at one time of the day might be unreasonable at another? Account must be taken of the exact level of noise and when the nuisance occurs. If we simply prescribed that steps must be taken, we would end up with a rigid regime that might stop people putting up a set of shelves or something like that.

Matthew Green: My hon. Friend is on to a good point. However, I turn to the Minister's usual defence, which is that the term ''reasonable'' is well established in law and would be well understood by the judicial system, should the matter end up in court.

Sydney Chapman: I am not trying to be pedantic. I could understand the hon. Gentleman using the word ''reasonable'' if it also applied to the other five of the six sets of conditions in the clause. I was satisfied—or reasonably so—by the Minister's explanation of ''reasonable'' in another debate. The only distinction that I can see between the amendment and subsection (2)(b) is the word ''reasonable''. Apart from that the provision is the same in its scope and its intention. That is the simple point that I am making. If the hon. Gentleman does not want to pursue it, fair enough.

Peter Pike: I too am satisfied that we are making reasonable progress.

Matthew Green: I shall try to be brief when dealing with the far more substantive point. The Government version of the paragraph talks about the landlord
''controlling the behaviour of persons occupying or visiting the house'',
 whereas the amendment refers to 
''reasonable steps being taken to address any nuisance or annoyance caused''.
 There is a substantial difference. The amendment brings the private sector into line with the social sector by using the same terminology as that used in the regulations relating to social sector and council housing. The term ''controlling the behaviour'' puts an extra duty on the private sector that goes beyond that on the social sector. 
Mr. Hayes rose—

Peter Pike: Mr. Hayes, remember what you said earlier this afternoon.

John Hayes: Thank you, Mr. Pike.
 The hon. Member for Ludlow should wrap this up as quickly as possible, because he is in all sorts of difficulties. Local authorities, housing associations and others have a responsibility to their tenants. If we are 
 to deal with antisocial behaviour properly, all landlords should take that responsibility seriously. Good landlords already do. I do not know whether the hon. Gentleman is exercising the Liberal conscience, but if he is, he should draw his remarks to a close promptly, or we shall make no progress at all.

Matthew Green: If I did not take so many interventions, I would probably get to the end faster. I sat down once, but I was invited to respond by the hon. Member for Chipping Barnet (Sir Sydney Chapman).
 To come back to the point, the amendment brings the provision into line with those for the social sector and the council house sector. Therefore, far from being a woolly Liberal, I am trying to ensure that the private sector only has to operate at the same level as the social sector, thus bringing the Bill into line with other legislation.

Yvette Cooper: The clause provides for the HMO licence conditions that a local authority may include on a licence and those that they must apply. Specific conditions that the local authority may use are set out in subsection (2) and include provisions on the behaviour of the occupants. Subsection (3) refers to schedule 4, which sets out the mandatory conditions for licences issued under part 2 for HMOs and part 3 for selective licensing.
 In identifying the mandatory conditions for part 2 and part 3 licences, we have considered what is necessary to ensure tenants' safety. Therefore, the conditions set out in the schedule include having a gas safety certificate, keeping electrical appliances and furniture in a safe condition, keeping smoke alarms in proper working order and so on. In addition, the landlord will be required to supply the occupier of the house with a written statement of the terms on which they occupy it. Most good landlords have written agreements, because they see them as a key part of managing the relationship with their tenants. The purpose of licensing is to encourage landlords to take greater responsibility for the relationship with their tenants. That includes tackling tenants' anti-social behaviour when it has an impact on the surrounding community. 
 Amendment No. 260 would limit the scope of the behaviour that a local authority might seek to control through imposing a condition on a licence under clause 56(2)(b). The amendment would limit the condition to one that would address nuisance or annoyance caused by persons occupying or visiting a house, and it would require specifically that the steps that the condition would require to be taken were reasonable. I have some sympathy with the intention behind the amendment. Clearly, we want to ensure both that the requirements on landlords are reasonable and that we are dealing with antisocial behaviour rather than any aspect of people's behaviour. 
 Let me set out the safeguards that are already in place in the Bill, first on the issue of reasonableness. Local authorities and public bodies have duties to 
 behave reasonably. It is set out in case law. It would be unreasonable to impose unreasonable conditions on landlords. Therefore, there is already a reasonableness test that must be passed. Clause 56(2) begins: 
''Those conditions may, in particular, include (so far as appropriate in the circumstances)'',
 therefore the test of reasonableness is also inherent in the wording of the clause. 
 Under subsection (6), a condition such as that set out under subsection (2)(b) could not go beyond what a landlord would be required to do in respect of his contractual relationship with a tenant. That provides a further safeguard. Moreover, the landlord would be able to refer a condition to the independent housing tribunal if he was concerned about it. A series of safeguards would ensure that the conditions are reasonable because, clearly, a landlord cannot be expected to take responsibility for each aspect of a tenant's behaviour. Tenants must take responsibility for their own behaviour. Nevertheless, there are things that private landlords can do, as can social housing landlords and housing associations, to prevent antisocial behaviour from occurring. 
 The second concern that is implicit in the amendment is that the conditions should require steps being taken to address the nuisance and annoyance caused, rather than with a view to controlling people's behaviour. I am happy to consider the wording of the provision to see how it relates to the wording used in respect of social landlords or local authorities. We do not intend the provision to apply to every sort of behaviour against which a local authority is prejudiced. It must be reasonable and it must deal specifically with antisocial behaviour. Again, we must allow local authorities to take responsibility for their decisions and have flexibility to address the sorts of antisocial behaviour problems that they have in their area. Conditions will have to be proportionate for good reason: like others, local authorities are bound by the safeguards of the Human Rights Act 1998. Proportionality is a further safeguard in that respect. 
 The amendment would cause an additional problem: it would be too restrictive by only allowing conditions to be imposed that would demand action to address nuisance and annoyance when such behaviour had occurred. It may be appropriate for local authorities to set standards of behaviour that they believe landlords should require their tenants to meet or, for example, to expect landlords to make clear to tenants in advance that antisocial behaviour will risk the tenancy. In practice, there may be steps that local authorities can take to encourage landlords to take action to prevent antisocial behaviour from happening in the first place rather than simply patching up such behaviour after it has occurred.

Andrew Selous: I have a particular interest in subsection 2(b) because it is of much concern to many of my constituents. Will the Minister elaborate briefly on what powers are envisaged by the words ''controlling the behaviour''? In particular, what ultimate sanction will be left to the landlord? My experience is that landlords of all types of tenures can
 be very slow to do something about such problems, which causes severe difficulties in our constituencies.

Yvette Cooper: There are legal powers for landlords, whether private landlords, local authorities or housing associations, to enforce tenancy agreements. Clearly, it will be for landlords to decide how they should enforce tenancy agreements and what action they should take, but there are powers in place.
 I agree that landlords of every type should take action swiftly and should be responsible about addressing antisocial behaviour. We know of many examples from across the country of local authorities and housing associations that take antisocial behaviour seriously and take all kinds of responsible action both to prevent it and to address it once it occurs. The intention behind the clause is to extend that capacity and promote such responsible behaviour among private landlords as well. Many already take such action, but, with HMOs and selective licensing, which we shall discuss in the next part of the Bill, it is right to promote such behaviour. 
 The amendment would not help to prevent antisocial behaviour. There are safeguards to ensure both that landlords are reasonable and that demands on tenants are proportionate. Also, I have undertaken to consider further the wording across different sectors. For those reasons, I ask the hon. Member for Ludlow to withdraw the amendment.

Matthew Green: I am particularly reassured by the Minister's last comment that she is going to consider the provisions to ensure that they do not impose different conditions on different sectors.

Yvette Cooper: To clarify, I am happy to look at the different wording that applies across the different sectors, but I certainly cannot undertake to apply identical wording to different sectors, because there may be reasons not to do so.

Matthew Green: I thank the Minister for that clarification, which is somewhat reassuring. I am happy to leave the matter for the time being, so I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 56 ordered to stand part of the Bill. 
 Schedule 4 agreed to.

Clause 57 - Licences: general requirements and duration

John Hayes: I beg to move amendment No. 274, in
clause 57, page 37, leave out line 36 and insert 
 'The licence period shall end five years after'.
 As you can tell, Mr. Pike, I have moved into semi-relaxed mode as we approach the end of our important business. As the Bill stands, the maximum length a licence can stand for is five years. This probing amendment is designed to test what the Government see as the likely period of a licence. My anxiety is that different tests may need to apply in different circumstances. What I mean by that—I made the point earlier, but it is worthy of repetition—is that the marketplace is rapidly moving. The local authority may want to issue licences for property that changes 
 hands or changes its status. It is important to know precisely what the Government intend during the period in which the licence applies, because of the possibility of rapid change in type and status of various kinds of property. I hope that the Minister can clarify the matter. However, I do not want to delay the Committee unduly, so I shall bring my remarks to a close.

Robert Syms: The licence will run for five years, and because it is to be introduced at one time, the vast majority of properties will be licensed at about the same time. Therefore, will there not be bunching? Local authorities' environmental health officers will be examining HMOs and licensing a lot for a period, then there will not be very much business, and then there will be a lot again. Has the Minister for Housing and Planning thought about the implications of this for local government? For vehicle licences, there is a constant monthly and annual turnover, so there is a steady flow of work. For these property licences, because of the start date and the five-year period, it is inevitable that there will be peak periods of work. Environmental health officers will sometimes have a lot to do, and at other times they will not have a lot to do. Have the Government thought about the throughput of work?

Keith Hill: I congratulate the hon. Member for South Holland and The Deepings on an excellent recovery.
 Clause 57(1) provides that a licence must not relate to more than one HMO. A licence is valid for a period that is specified in it, but for not more than five years—although it may be brought to an end earlier if there is non-compliance with a provision of the licence. A licence is non-transferable, and upon the death of a licence holder a three-month temporary exemption would automatically be granted in line with the provisions of clause 51. 
 Amendment No. 274 provides that a licence would be for five years in all cases. That returns us to the argument about providing flexibility for local authorities. In practice, we expect the vast majority of licences to be granted for a five-year period. If a licensee does not agree with a decision to grant a licence for a shorter period, they can appeal against that decision and a local authority will have to explain why a shorter period is appropriate. However, flexibility may be advantageous in a few circumstances: for example, if a local authority knew that an additional licensing designation was going to end on a particular date, they could grant licences that would run to that date, and therefore would not have to go through the trouble of revoking each licence individually. 
 The hon. Member for Poole mentioned the implications for local authorities and environmental health officers of the bunching of start dates. The Government do not expect the licensing of properties to occur simultaneously. The assessment of such properties is a complex task. I remind the Committee of some interesting data: the local authority in Nottingham reckons to bring 100 HMOs a year into registration. I am not saying that it would be impossible to bring more HMOs into schemes during 
 the course of a year. However, we expect the implementation of both the licensing regime and the health and safety rating system to take place over a year. We want the exercise to be conducted in a reasonably finite period, so we do not anticipate such a bunching effect.

Robert Syms: Where a current voluntary scheme is rolled into the compulsory scheme, will all the properties in the voluntary scheme start off on day one on the same terms, or will their licences under the voluntary scheme run for their full period?
 In addition, if someone has a licence of five years but a local authority has 1,000 properties to inspect in a very short time, will it be possible for the property to be inspected after four and a half years but for the licence to be issued to follow on from the end of the five-year period? If we are talking about heavy fees—perhaps £10,000 or £15,000—and the owners of a property might be a little bit concerned if they are being short-changed on their five years.

Keith Hill: On the implications of the existence of voluntary schemes, such as accreditation schemes, we expect there to be a transitional regime with allowances made for the fact that there are already properties, which are recognised and known to the local authorities, that have been assessed to a degree. We envisage a transitional process—we may have the opportunity to talk about that in due course. In terms of the hon. Gentleman's example, those are licences for specific properties, therefore one would expect, in the case of the management regime, that the licence would apply for the five-year period.
 We expect new properties to come on stream. We are eager to encourage the growth of the private rented sector, of which the sorts of properties that we have discussed, well managed, will be a part. We expect there to be a natural evolution and flow in the delivery of such licences. I hope that that goes some way to satisfying the inquiries of the hon. Member for South Holland and The Deepings. I ask him to withdraw his amendment.

John Hayes: It is interesting that the Minister's made it clear that he expects that, in most cases, licences would last for five years. That will give the sector some sense of certainty so it can anticipate and plan accordingly. As he says, there may be exceptional circumstances where the opposite applies, but for the most part we are looking at a five-year period. The purpose of my amendment was to offer clarity and test the Government on the time scale. I think that we have done so adequately, so I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 57 ordered to stand part of the Bill. 
 Clauses 58 to 60 ordered to stand part of the Bill.

Schedule 5 - Licenses under parts 2 and 3:

Amendments made: No. 126, in 
schedule 5, page 165, line 5, leave out 'county court' and insert 'residential property tribunal'.
 No. 127, in 
schedule 5, page 165, line 12, leave out 'county court' and insert 'residential property tribunal'.
 No. 128, in 
schedule 5, page 165, leave out lines 27 to 34 and insert— 
 '(3) A residential property tribunal may allow an appeal to be made to it after the end of the period mentioned in sub-paragraph (1) or (2) if it is satisfied that there is a good reason for the failure to appeal before the end of that period (and for any delay since then in applying for permission to appeal out of time).'. 
No. 129, in 
schedule 5, page 165, line 36, leave out 'county court' and insert 'residential property tribunal'.
 No. 130, in 
schedule 5, page 166, leave out line 1.
 No. 131, in 
schedule 5, page 166, line 2, leave out 'court' and insert 'tribunal'.
 No. 132, in 
schedule 5, page 166, line 4, leave out 'court' and insert 'tribunal'.
 No. 133, in 
schedule 5, page 166, line 5, leave out 'court' and insert 'tribunal'.
 No. 134, in 
schedule 5, page 166, line 19, leave out 'Court of Appeal' and insert 'Lands Tribunal'.
 No. 135, in 
schedule 5, page 166, line 22, leave out 'Court of Appeal' and insert 'Lands Tribunal'.—[Keith Hill.]
 Schedule 5, as amended, agreed to.

Clause 61 - Offences in relation to licensing of HMOs

Amendment made: No. 41, in 
clause 61, page 41, line 24, leave out from 'so,' to end of line 26 and insert 
 'one of the conditions set out in subsection (9) is met. 
 (9) The conditions are— 
 (a) that the period for appealing against the decision of the authority not to serve or grant such a notice or licence (or against any relevant decision of a residential property tribunal) has not expired, or 
 (b) that an appeal has been brought against the authority's decision (or against any relevant decision of such a tribunal) and the appeal has not been determined or withdrawn. 
 (10) In subsection (9) ''relevant decision'' means a decision which is given on an appeal to the tribunal and confirms the authority's decision (with or without variation).'.—[Keith Hill.] 
Clause 61, as amended, ordered to stand part of the Bill.

Clause 62 - Further sanctions relating to unlicensed HMOs

Matthew Green: I beg to move amendment No. 286, in
clause 62, page 41, line 36, at end insert 
 'and 
 (c) section 21 of the Housing Act 1988 (c.50) shall not apply.'.
 This is a probing amendment designed to raise the problem that the ''no rent payable'' sanction against unlicensed landlords in clause 62, which is sensible, could result in the eviction of tenants. The stipulation that section 21 of the Housing Act 1988 shall not apply prevents landlords from using the accelerated possession procedure to evict tenants as a result of these sanctions. 
 The current provisions do not reflect the reality faced by tenants on low incomes, with no security of tenure, who are unable to enforce their housing rights without risking eviction. HMOs represent a scarce housing resource and the clause could result in many existing tenants being made homeless. Those with an assured shorthold tenancy will simply face possession action by their landlord if they attempt to enforce the provision relating to not paying rent on unlicensed properties. In practice, many tenants will choose not to risk losing their homes and will simply continue to pay. Tenants on housing benefits will face the withdrawal of their benefit, leaving them unable to pay their rent unless they make huge sacrifices in relation to their limited income support or other income. There is a risk of homelessness if the landlord brings the shorthold tenancy to an end. 
 The Minister is probably aware that in a submission to the Select Committee on the Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions, the Brent private tenants' rights group expressed its concern that 
''Shorthold tenants will have no more power to refuse to pay the rent than they have power to exercise any other housing right. For housing benefit claimants, the situation is tragic, because their benefit will cease, and they will lose their homes at the earliest opportunity. Many of these tenants will be in priority need, and will have no option but to present as homeless to the local authority.''
 The LGA also voiced concern. It stated: 
''the idea that rent will not be payable on an unlicensed premises is of some concern to Tenancy Relations Officers (TROs) who feel that the tenant could become the target for landlord harassment and possible eviction. A rise in homelessness and the attendant resource implications . . . could be an unintended by-product of this measure.''
 The Select Committee concluded: 
''We are concerned that the 'no rent payable' provisions could have adverse consequences for tenants, potentially leading to their eviction. If the Government plans to retain these provisions, the final version of the Bill must include adequate safeguards so that tenants cannot be evicted because their landlord is unlicensed.''
 In their response to the Select Committee, the Government made a commitment to address the concerns that were raised. They said: 
''The Government accepts the principle that tenants should not be evicted because their landlord is unlicensed. However, the Government does not consider that it is appropriate that a person engaged in a criminal activity (that is, operating a property without a licence) should benefit from that activity by lawfully receiving or demanding rent. The Government accepts the need to refine the provision, especially to ensure that tenants are safeguarded against eviction for non-payment of rent, where the only reason for such failure is on account of the provision. This is a matter to which the Government is giving further consideration.''
 Clearly, the results of that further consideration have 
 not yet made their way into the Bill. I hope that they will, because, at the moment, clause 62 does not offer tenants any greater protection from eviction than was available under clause 67 of the draft Bill.

Keith Hill: Clause 62 provides further sanctions in relation to unlicensed HMOs. In particular, it is concerned with any period during which an offence is committed by a person having control of, or managing, an HMO that is required to be licensed, but is not so licensed. If an HMO is required to be licensed, but is not, and the person controlling or managing it is therefore guilty of an offence, no rent is payable by occupiers and no charge can be made in lieu of rent. Occupiers' security of tenure is not affected by the provision, and nothing in it affects the terms of occupancy other than the payment of rent.
 Amendment No. 286 would remove the ability of landlords to obtain a mandatory court order for repossession of their property after giving two months' notice. The hon. Member for Ludlow has alluded to the concerns, but perhaps he has not caught up with the Government's response to them. Concerns were raised during consultation on the draft Bill about the way in which clause 62 would apply. We have taken on board comments made on the draft Bill, and the revised clause makes much clearer what the provision does. The Government's view is that persons letting properties that are required by law to be licensed, and who fail to apply for a licence, should not be able to profit from their disregard of the law by receiving rent. It is not a question of landlords being required to house tenants rent-free. 
 The clause does little more than clarify the common law position. The courts simply will not enforce an unlawful contract. If an HMO cannot be lawfully operated without a licence, any tenancy agreement in an unlicensed HMO will be unlawful. The clause makes it clear that occupiers of unlawfully unlicensed HMOs are not to suffer any penalty, but that criminal landlords cannot profit from their failure to obtain a licence. We do not want landlords to seek to evade their responsibilities to be licensed simply by evicting tenants. 
 The terms of clause 62 (4) are that 
''nothing in this Part affects the validity of any tenancy or licence under which a person occupies an HMO during a period to which that subsection applies.''
 Legislating to provide that a landlord cannot rely on one of the grounds for recovering possession of his property, but leaving him able to rely on all the other grounds would produce a very odd result. 
 The hon. Member for Ludlow mentioned section 21 of the Housing Act 1988. A landlord would not get very far if he sought to rely on that section. The tenant facing eviction only has to report the fact to the local authority, and it will be obliged to grant a licence or to make an interim management order. I am not persuaded that the correct approach is to put further procedural hurdles in the way of a criminal landlord. The objective is to ensure that landlords who are required to get a licence actually apply for one. For 
 those reasons, I invite the hon. Gentleman to withdraw his amendment.

Matthew Green: The Minister gives some reassurance, but our debate on the clause has not dealt fully with the concerns raised. At this time of the day, I will not pursue the matter further. However, the proof will be in the testing and, unfortunately, some tenants may suffer as a result or may be bullied by their unlicensed landlord into paying rent by being told that they will lose their tenancy agreements if they do not. It will be difficult for tenants to know what their rights are and how to deal with such a situation. The Government might have the letter of the law on their side, but the difficulty lies in the spirit of the law and the means by which tenants will know what their rights are.
 I suspect that the Government may need to return to the legislation in a couple of years, because this area could prove to be problematic. I understand the Government's reasons for saying that they are happy with the clause as it stands: a legal framework already surrounds the tenancy agreement, and the tenancy agreement would be invalid. The problem, however, is that not many tenants will know the details of the Housing Act and will not necessarily know that they 
 should not pay rent; or that the landlord may say that if they do not pay rent, they will not be granted an agreement when the building is licensed. If the agreement is invalid, it is invalid from both sides. I can therefore see people being forced to pay money. The Government may have to reconsider this issue. For the moment, however, I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn. 
 Clause 62 ordered to stand part of the Bill. 
 Clauses 63 and 64 ordered to stand part of the Bill.

Clause 65 - Index of defined expressions: Part 2

Amendment made: No. 42, in 
clause 65, page 43, line 20, at end insert— 
 'Residential property tribunal 
 Section (Residential property tribunals)'.—[Keith Hill.]
 Clause 65, as amended, ordered to stand part of the Bill. 
 Further consideration adjourned.—[Paul Clark.] 
 Adjourned accordingly at Five o'clock till Thursday 29 January at ten minutes past Nine o'clock.